A newly announced rebate for greenhouse growers was cheered by members of the industry who had long argued that added charges for natural gas would hamstring the local industry.
The Alberta Carbon Levy came into effect on Jan. 1, just hours after the provincial government announced that greenhouse producers would be eligible to receive back 80 per cent of their new costs.
That puts them on a similar footing as growers in British Columbia, where a carbon charge has been in place since 2012 but with an 80 per cent rebate program for greenhouses.
“It puts us back on the playing field,” said Milt Pancoast, the part-owner of Chinook Greenhouses on Coburg Ave. in Medicine Hat.
That operation produces about 11 million saplings each year that are sold in bulk contracts to forestry companies.
With the Alberta and B.C. growers supplying almost the entire reforestation industry, Pancoast feared that west coast growers would have a built-in advantage on pricing.
“If B.C. got an 80 per cent (rebate) and we got zero? It would have been a huge problem, because we can’t grow at a loss.
“This (rebate) is good news for us, and the vegetable growers as well.”
Vegetable and floral producers as well will be eligible to recoup up to 80 per cent of the added costs.
Those operators argued that the levy would severely impact their business, adding costs and making them uncompetitive against producers in other jurisdictions.
Pancoast estimates that his facility would have paid an additional $400,000 annually with current carbon price and the eventual increase to $15 minimum wage from $12.20 where it sits today.
Estimates adjusted for the carbon levy alone, or the rebate program announced this week, were not available.
“We’re price takers,” he said. “There’s just not enough room on our bottom line to carry that.”
Medicine Hat MLA Bob Wanner said the rebate was the result of advocacy of growers and his office as well as ministers who met with producers in the southeast over the course of the year.
“I’d also like to thank Agriculture and Forestry Minister O’Neil Carlier… for his committed effort over the last weeks and months in advocating for this rebate for greenhouse producers,” said Wanner. “His efforts, as well as those of Environment and Parks Minister Shannon Phillips, are very much appreciated.”
Officials with Redhat Co-operative were not available for comment on holiday Monday.
Earlier this fall, Red Hat president Albert Cramer, of Big Marble Farms, said during the fall’s federal byelection that the federal plan to have individual province’s price carbon at $50 per tonne by 2022 would add $750,000 in operating expense at that time.
The Alberta rate that went into effect Sunday is $20 per tonne, equal to about $1.011 per gigajoule of natural gas and 4.49-cents per litre of gasoline.
A $50 rate equates to about 11-cents per litre of fuel and about $2.50 per gigajoule of natural gas.
The Alberta carbon levy is administered by the province.
An Alberta government statement says the local carbon price had helped in the process of approving new pipelines to ship petroleum out of province.
“Even with the implementation of Alberta’s carbon pricing, Alberta continues to have an overall tax advantage compared to other provinces, with no provincial sales tax, health premium or payroll tax,” it read.
About two-thirds of Alberta households will receive rebates of between $200 and $360. The province also dropped the small business tax rate from 3 per cent to 2 per cent to help offset the effect of the tax.
Opposition parties have said the government has not properly estimated the costs to businesses.
“We anticipate that many Alberta businesses will be forced to close their doors as they buckle under the pressure that this carbon tax and other NDP policies have created,” said Ric McIver, the interim leader of the Progressive Conservatives, in a release.